Euro steady after ECB bond plan

The euro was steady close to a two-month peak versus the dollar in early Asian trading on Friday while the yen suffered heavy losses as markets reacted to the European Central Bank’s announcement on solving the eurozone debt crisis.

Mario Draghi, the ECB president, held a news conference on Thursday at which he unveiled a fresh and potentially unlimited bond-purchasing plan with the intention of reducing the high borrowing costs of embattled member states including Italy and Spain.

The announcement, which was viewed as Draghi backing up his pledge to carry out whatever measures were needed to save the euro, gave investors renewed hope that the ECB had taken it upon itself to try and curb the bloc’s debt troubles.

Societe Generale strategist Vincent Chaigneau said that the central bank’s actions offer time and ensures risk appetite will be present again for the time being. He went on to say that Draghi’s news was positive but that he alone cannot solve the debt crisis, adding that he must get governments to play a bigger part too.

The single currency was steady at $1.2633, not far from Thursday’s high of $1.2652, the highest it has been since early July. Against the yen, the euro rose by 0.1 per cent to 99.66 yen, close to Thursday’s two-month peak of 99.80 yen.